West Farms — Outside the brown brick towers of West Farms Square, the city trumpeted a "major milestone" this summer: Mayor Michael Bloomberg's affordable housing initiative, the New Housing Marketplace Plan, was now three-quarters of the way toward reaching its goal to create or preserve 165,000 housing units by the end of 2014.

While the good news was delivered under a blue sky, officials later acknowledged the threat of darkening clouds. The last year brought a $71 million cut in federal funding to the city's Department of Housing Preservation and Development, an agency that had been forced to lay off 300 employees over the past three years. Future funds to HPD may now be in jeopardy as Congress' "super committee" settles on methods to reduce the U.S. budget deficit.

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Patrick Arden
Patrick Arden
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The axe could fall on programs vital to the New Housing Marketplace Plan, such as the Low Income Housing Tax Credit, which indirectly subsidizes financing for the construction or rehabilitation of affordable housing, and Community Development Block Grants. Earlier this year the Republican House proposed eliminating block grants, which provided HPD with about $130 million—or nearly 76 percent of its federal funding—in the 2011 budget. The city said the cut would have meant the loss of 700 more workers and decimated the agency's efforts to fix unsafe housing conditions.

Not surprisingly, cuts in federal funds come down particularly hard on the poor. In 2010, the New York City Housing Authority's Section 8 program faced a $42 million shortfall, placing as many as 10,000 families at risk before federal intervention. HPD ended up taking on NYCHA's Section 8 participants. HPD Commissioner Mathew Wambua recently told a breakfast meeting on affordable housing that the city couldn't bear the burden of deeper cuts without "significant pain."

A plan, then a shift

The mayor unveiled his New Housing Marketplace Plan in December 2002 to develop and preserve apartments for low- to middle-income tenants. In exchange for loans to construct or to renovate housing—or in return for tax breaks—building owners or developers would agree to keep rents affordable, which means rents can claim no more than 30 percent of tenants' wages. These agreements can last for decades.

Traditionally, federal regulations have targeted most subsidized housing at New Yorkers earning 80 percent of the Area Median Income or less, which generally translates into a family of four making a maximum of $63,360 a year. The mayor's plan differed from earlier ones by targeting families with very low incomes (30 percent of AMI or less) as well as income groups that normally aren't served by affordable housing, aiming 11 percent of the plan's units to families of four making between $63,000 and $95,000 a year and 21 percent to those with six-digit incomes.

These moderate- and middle-income New Yorkers face a shortage of affordable housing, but claims that the mayor's plan helps the city's poor are largely "exaggerated," says Tom Waters, a housing policy analyst at the Community Service Society of New York, an advocacy group for low-income people (and the owner of City Limits). "Most families fall in the under $60,000 category."

Bloomberg was unapologetic when the majority of apartments at the new Hunters Point South development were targeted to households making around $100,000 a year: "We are setting the stage for the largest investment in permanently affordable housing for our police officers, nurses, teachers, and public employees and other middle-income New Yorkers." At other times, however, the mayor went out of his way to characterize his plan as an all-encompassing life preserver that could offset even the losses of stabilized-rent apartments: "We can secure our future as a city of opportunity, where all New Yorkers can afford to live and pursue their dreams."